Small businesses hold Bitcoin for three main reasons: protecting cash reserves from inflation, signaling innovation to customers and talent, and gaining asymmetric upside without betting the company. It’s not about speculation-it’s about treasury diversification.
The question isn’t “should you go all-in on Bitcoin?” That’s gambling.
The real question: should 1-5% of your business cash reserves be in an asset that hedges against currency debasement and has outperformed every other asset class over the past decade?
Here’s why growing numbers of small companies are answering “yes.”
Reason 1: Your Cash Is Losing Value
Small businesses typically hold 3-12 months of operating expenses in cash. That’s prudent-you need liquidity for payroll, inventory, and unexpected expenses.
But here’s the problem: that cash loses purchasing power every year.
| Held $500K Cash For | Inflation (3% avg) | Purchasing Power Lost |
|---|---|---|
| 1 year | 3% | $15,000 |
| 3 years | ~9% | $45,000 |
| 5 years | ~16% | $80,000 |
You’re not being paid to hold cash. You’re paying for the privilege.
The Bitcoin Alternative
Bitcoin isn’t guaranteed to appreciate. It’s volatile. But it has properties that make it attractive as a partial hedge:
- Fixed supply: Only 21 million will ever exist
- Decentralized: No government can print more
- Liquid: Sell 24/7 on global markets
- Track record: Despite volatility, significant appreciation over any 4-year period
A 5% Bitcoin allocation doesn’t eliminate inflation risk. But it provides a hedge that cash and T-bills don’t offer.
Reason 2: Competitive Signaling
For certain businesses, holding Bitcoin sends a message.
Tech Companies and Agencies
If you serve innovation-focused clients, a Bitcoin treasury signals you practice what you preach. The emergence of “Bitcoin Treasury Companies” is becoming a recognized category:
Recruiting Advantage
Top talent, especially in tech, often holds Bitcoin personally. A company treasury that includes Bitcoin signals alignment with employee values. Some companies even offer salary in Bitcoin as an option.
Customer Attraction
Businesses accepting Bitcoin for payment often hold some. This creates alignment with Bitcoin-native customers who prefer to support companies in the ecosystem.
Reason 3: Asymmetric Upside
Traditional treasury assets (money markets, CDs, T-bills) offer low risk and low return. Bitcoin offers higher risk and potentially much higher return.
The Math of Small Allocations
Consider a 5% allocation:
| Scenario | Impact on $1M Cash Reserve |
|---|---|
| Bitcoin goes to $0 | Lose $50K (5%) - painful but survivable |
| Bitcoin doubles | Gain $50K (5%) - nice bonus |
| Bitcoin 5x’s | Gain $200K (20%) - material impact |
| Bitcoin 10x’s | Gain $450K (45%) - transformative |
The downside is capped at your allocation. The upside is theoretically unlimited.
This asymmetry is why small allocations make sense even for risk-averse companies. You’re not betting the company-you’re buying optionality.
What Small Companies Are Actually Doing
Based on public examples and conversations with founders:
The 1% Starter
Most common approach. Allocate 1% of cash reserves just to:
- Set up proper custody and accounting
- Experience price volatility firsthand
- Have a framework to scale later
The 5% Strategic Allocation
Companies with stable revenue and longer runway often settle on 5%. Large enough to matter, small enough to not impact operations.
The 10-20% High-Conviction Play
Founder-led companies where the founder has personal Bitcoin conviction sometimes go higher. Usually paired with:
- Strong recurring revenue
- Low debt
- Multi-year runway
When Bitcoin Treasury Doesn’t Make Sense
Be honest about whether this fits your situation:
Don’t allocate if: - You need the cash within 12 months - You can’t stomach a 50% drawdown - Your margins are thin and cash is tight - You’d panic-sell during a crash
Consider allocating if: - You have 12+ months runway - You understand Bitcoin’s volatility - A total loss of the allocation wouldn’t impact operations - You have conviction to hold through cycles
Real-World Example: Tahini’s Restaurant Group
Tahini’s, a Canadian restaurant chain, began allocating treasury to Bitcoin in 2020. Their CEO has been vocal about the reasoning:
- Cash reserves were losing value to inflation
- Traditional investments (real estate, stocks) felt overvalued
- Bitcoin offered a hard money alternative
They continue to buy monthly regardless of price:
The key: they treated it as a long-term treasury decision, not a trade.
Next Steps
If the reasons above resonate:
- Read the complete guide: Bitcoin Treasury Strategy for Small Companies
- Understand the accounting: FASB 2025 Fair Value Rules
- See who’s doing it: Browse our leaderboard of Bitcoin treasury companies
Track which companies hold Bitcoin at BitcoinCompanies.co.